Santa Cruz County reinstates tax break for seniors

SANTA CRUZ -- The county on Tuesday reinstated a program giving low-income seniors and those with disabilities a big break on property taxes, allowing them to keep the tax man at bay and helping them stay in their homes.

An earlier state-run program was a casualty of the state's budget woes. Under the one-year pilot program, qualified seniors delay paying property taxes until they die or sell their home, at which point the county collects the back taxes.

"This Board of Supervisors and its predecessors recognized that low-income seniors and disabled persons are best served by being able to remain in their homes," said county Treasurer Fred Keeley, who oversees the program. "It provides them with a way to stay healthier, to live longer, to have less stress and worry in their life."

The state previously ran the program, which was available across California, before it was cut to save money. A 2011 bill passed by the Legislature allowed counties to reinstate it themselves, but Santa Cruz is so far the only one to do so.

To get there, the county had to perform a bit of regulatory sleight of hand. At the last minute, the California Banker's Association lobbied for a clause prohibiting counties from putting a lien on participants' homes, which helps guarantee taxpayers get their money back.

That was a deal-breaker for every other county. Santa Cruz County found a way around the blockade by running the program through its housing authority, a distinct entity from the county and thus one not prohibited from taking out liens.

"I did think it was over, but that's part of what Santa Cruz County did. They steered around that and did a tremendous job," said Jim Anastas, a 70-year-old Live Oak resident who would benefit from the program and who followed the bill through Sacramento.

But running it through the housing authority also means only homeowners in the unincorporated areas are eligible for the program, though local cities also could run the tax breaks through their affordable housing programs.

While it could be expanded later, the initial effort is modest and would benefit about 20 families. To qualify, participants must be at least 62 years old, blind or disabled, own and occupy their homes, have a household income of $35,500 or less, and have at least 20 percent equity in their homes.

The application fee for the program is $200, and the back taxes are paid back with interest.

"It's not even close to a tax giveaway," Keeley said. "This money is a loan, which is protected by a lien, which is then guaranteed to be repaid when the low-income senior or disabled person passes away or they sell their home."